The study was concerned with the merits of functional level versus nominal level achievement testing. The reliability of test scores when students were tested at their functional levels rather than their nominal levels was examined. Motivation and frustration of students was studied during testing at their functional levels. Another goal of the study was to examine the relationship between teacher judgments and locator test scores. A determination was made as to how each related to final test scores achieved. The 3R's Test, a general achievement test battery was used in the study. The results of the testing were discussed in terms of the three areas of concern, and generally confirmed the theoretical expectation that appropriate assignment to functional level produced more reliable scores for a larger proportion of students tested. Some theoretical and common sense assumptions about the merits of functional level testing were confirmed. However, the results in terms of proportion of in-range scores and student reports about the testing were of a smaller magnitude than expected. (DWH)